Joseph "Little Caesar" DiVarco, the Outfit mobster who oversaw gambling, vice and nightlife on Chicago's Near North Side from the mid-1940s to the mid-1980s, was a big earner according to recently released FBI documents. For example, an informant told the FBI in 1971 that "money . . . is no problem for DI VARCO inasmuch as he made big money in the past and saved much of it," and then another informant told the FBI a year later that "DI VARCO has money and is constantly looking for a way to make more money."
DiVarco's knack was entangling the Outfit rackets such as gambling and prostitution under the cover of bars and clubs, and the FBI files comprehensively detail his control of the nightlife industry on the Near North Side. The Outfit had interests in most establishments, the agencies which staffed them and the vendors who supplied them. There didn't seem to be a single angle which escaped the mob's attention in its penetration of the nightlife industry. Little Caesar was involved in so many seemingly legitimate ventures perhaps in another life he would have been an upstanding member of the Chamber of Commerce, and one almost can imagine the mobster believing his own lie when telling the FBI during a 1963 interview "that he was not engaged in any illegal activities and that he was a working man who worked hard at his businesses."
Of course, DiVarco wasn't a legitimate businessman, and perhaps was destined to join the gangland ranks given the underworld violence in Little Italy to which he was exposed as a little boy. Joseph DiVarco was born July 26, 1911 as Placido DiVarco to Vincent DiVarco and Frances Tornabene, and his grocer father was murdered on Death's Corner at Milton and Oak Streets on December 7, 1916 with a bullet in the back from Phillip Scaletta. The infamous corner earned its morbid nickname because the Black Hand would murder area shopkeepers who refused to meet its extortion demands, and then dump their bodies at the spot to make public examples of the poor souls. Apparently the lesson was not lost on Little Caesar who grew up to become a predator rather than the prey.
DiVarco had his first mob conviction at twenty-five years old when he pleaded guilty in 1936 to a counterfeiting charge for which he spent a year in prison, and the plea deal saved Ross Prio from prosecution for the crime. The stand-up move impressed the mob bosses, and DiVarco was sponsored into the Outfit by Tony Accardo although remaining in Prio's crew on the Near North Side.
Uncle Sam inducted DiVarco into the Army on April 6, 1942 where he served as a supply clerk but then honorably discharged him for convenience of the government on December 12, 1944 because Little Joey -- he was 5' 3" and 125 pounds -- was a psychopath. A February 1962 FBI memo states:
The military service record for DI VARCO indicates that he was seen in the neuro-pyschopathic consultation clinic and was given a diagnosis of: Constitutional pyschopathetic state, unqualified, manifested by early childhood traits, criminalism, emotional instability, inadequate personality, inability to profit from past experiences, lack of respect for the rights of others, poor civilian adjustment, numerous conflicts with the law, and somatic complaints unfounded on any organic basis.
After the U.S. military threw DiVarco's sorry ass back onto the Chicago streets he resumed the mob life. By 1949 DiVarco and Anthony "Tony Mack" DeMonte -- married to a first cousin of DiVarco -- "were heading up the muscle on the near north side replacing the Three Doms, namely DOMINICK BRANCATA, DOMINICK NUCCIO and DOMINICK DE BELLO," and DiVarco "was observed on the street in the night-life center . . . being respectfully greeted by all of the employees and operators of joints in the area." An October 1951 intelligence report identifies numerous night clubs in which DiVarco allegedly was involved:
Information was set forth regarding JOEY CAESAR's influence in the operation of taverns in the 42nd Ward, specifically those known as Bunny and Lou's, Palm Gardens, Foley's 835 Club, Cuban Village, Vine Gardens, Schiller's Clayton Lounge, Top Tap, Melody Casino, Club 19, The Spa, Rip Tide, Lake Shore Lounge, Walton Club, Streamliner, Ciro's, Stairway to the Stars, Minuet, the New Yorker, and the Silver Frolics. There is also some indication that CAESAR and his mob apply a tax to several of the strip shows on Clark Street as well as some of the taverns, and it is fairly safe to assume that the group has a definite part in the operation of the Talk of the Town and the Post Time.
DiVarco also oversaw many businesses which staffed or supplied the bars and clubs on the Near North Side. For example, a May 1952 memo states:
Information is set forth which indicated that all advertising done by or for any of the taverns or night clubs in the 42nd Ward under the supervision of the crime syndicate can be placed or obtained only be seeing JOEY CAESAR who very apparently has supervision of such operations. This same rule applied to anyone interested in hiring or any girl seeking employment as a 26 girl, entertainer, hat-check girl, or any man seeking employment as a bartender. It would indicate that the only persons permitted to give orders other than CAESAR on such matters were TONY MACK and [redacted] although contact could be made through JIMMY ALLEGRETTI and DOMINICK NUCCIO who would have to get approval of any action from CAESAR.
Every supply or service that an establishment would require seemingly was supplied by companies tied to DiVarco including janitorial services, furniture and equipment, alcohol and food, vending machines and arcade games. Few clean establishments rebuffed the mob vendors. Business owners not only were afraid of retaliatory violence from the mob but its political power. For example, one DiVarco company -- The Sterile Glass Company -- offered some plunger-style washer for drinking glasses, and one barkeep told the FBI that he purchased it and the annual supply of accompanying detergent because otherwise "the 'Outfit' can close them up legally by just having the Health Department Inspector enforce every regulation on the books."
DiVarco and the Outfit acquired some of their clubs and business through old-fashioned extortionate threats. For example, "in a memorandum of October 30, 1952 it was indicated that JOEY CAESAR took control of the Cuban Village and the Stairway to the Stars by telling the proprietors they had to sell for his price," and "the proprietors knew they were being muscled but did not want to stand up against the syndicate mob." Others were acquired after the owners defaulted to mob loansharks. DiVarco allegedly took over Liberty Coffee Company because its owner was in "juice."
The Outfit bars were a vice smorgasbord which variously provided gambling, hookers and drugs to satisfy the degenerate compulsions of their customer base. For example, a June 2, 1954 report alleges that DiVarco "owned a share in 'The Bachelor Club' located at the rear of a tavern at 1005 North Rush Street," and "the place was described by those who were supposed to know as being a joint where narcotics could be procured." And an October 27, 1954 memo claims that DiVarco had "a big operation going at the Nite Life Lounge, 933 North State Street" where "cards and craps were offered." In 1962 an informant advised "that ROSS PRIO, DI VARCO and ALLEGRETTI are partners in the following strip joints: Playhouse, Silver Frolics, French Doll, Liberty Inn, Rubi Lounge, Diamond Lounge and the Shore Club."
Other Outfit bars catered to marginalized groups such as the beatniks or gays, and the wise guys were among the first to spot cultural trends to tap an unserved market. For example, a 1962 FBI memo stated that "DI VARCO apparently has an interest in a new bar . . . which will be called 'The Losers' and will be in the basement next to the Bourbon Street Night Club in Chicago, and will cater to 'beatniks.'" And a 1966 FBI report alleged that DiVarco was behind "a lounge in the basement of the Maryland Hotel" at 900 North Rush Street which "is to be a 'queer' operation," and "DI VARCO reportedly paid a considerable amount of money to obtain a license to open this spot."
The gay bars were a racket staple for the Chicago Outfit. Those that the mob did not own through hidden interests often were required to pay a street tax or protection money. The FBI was well aware of DiVarco’s shake down of gay bars by the early 1970s, and in 1978 launched an extensive investigation. Eight agents were assigned fulltime to the investigation, and involved electronic surveillance and cooperating witnesses. In December 1983 the feds indicted DiVarco and four other defendants for their alleged roles in shaking down gay bars in the Old Town and Near North Side neighborhoods. However, charges were dismissed against DiVarco after his defense lawyers produced records showing that a bar from which he allegedly extorted payoffs in 1979 had gone out of business three years earlier, and three out of the other four defendants were later acquitted at trial.
Although DiVarco was Prio's main boy on the streets Joey Caesar had some help in managing the Outfit's rackets on the Near North Side including from Joseph "Big Joe" Arnold who handled loansharking and Jimmy "the Monk" Allegretti -- followed later by Mike "the Fire Plug" Glitta -- who ran prostitution. DiVarco kept a close rein on the gambling operations -- no doubt the most profitable racket for the Chicago Outfit -- and his interests expanded beyond the Mid West to Las Vegas, NV and Miami, FL. An FBI memo describes a December 1963 crew meeting at which a 2-inch stack of $100 bills was distributed:
[Informant] advised in December, 1963, that for the past four or five weeks ROSS PRIO, JAMES ALLEGRETTI, JOSEPH DI VARCO and JOSEPH ARNOLD had been meeting practically every weekday in the dining room of the Water Tower Inn, 800 North Michigan, Chicago, Illinois. On occasion, FELIX ALDERISIO has also been meeting there with the above individuals. On one occasion, JOSEPH DI VARCO had met with PRIO, ALLEGRETTI, ARNOLD and another individual. DI VARCO had a "stack of $100 bills" which was estimated to be two-inches thick. This money was placed in stationery envelops and it appeared as though the money was divided or distributed among the group present.
The FBI documents illustrate DiVarco's ascent up the mob ranks as if he were climbing the corporate ladder. By the early 1960s according to an informant DiVarco "became a 'mustache' which he indicated meant that he became eligible to sit in on policy meetings." For example, in early 1961 an informant advised the FBI "that individuals such as 'MILWAUKEE' PHIL ALDERISIO, OBBIE FRABOTTA, JOSEPH 'CAESAR; DIVARCO, FRANK FERRARO, ROSS PRIO, JAMES ALLEGRETTI, and on less frequent occasions GUS ALEX and SAM GIANCANA hang out at the Park Lane Hotel dining room and cocktail lounge."
DiVarco did have career disappointments in the mob life. For decades he dutifully served under Ross Prio as his right-hand man, and was gunning -- so to speak -- to succeed the Near North Side boss after his death in 1973. However, Dominic Di Bella instead was chosen to replace Prio, and an informant advised the FBI at the time that "DI VARCO who was disappointed and angry at not having been appointed to that position himself." In May 1976 DiVarco finally obtained the coveted position when Di Bella was diagnosed with terminal cancer although DiVarco still answered to former Prio bodyguard Vince Solano.
By outward appearances DiVarco could have been just another corporate suit living the American dream and commuting each day from his home in the suburbs for work in the city. He married Greek girl Peggy Pahos, and the couple raised two children -- including son Vince who allegedly later joined the family business -- in the northwest suburb of Lincolnwood. The DiVarcos lived in a brick ranch-style home "with almost solid glass walls which are covered by closed drapes" in "an excellent neighborhood" which was purchased in 1954. DiVarco took great efforts to attract no attention: "DI VARCO very seldom has company and there are never any meetings or gatherings of the hoodlum element at his residence," and "the subject or his wife are seldom seen outside of the house." In short, "they lead a quiet life and are of no trouble to the Police Department or the neighbors." His wife regularly would visit her parents in Greece, and on occasion Little Caesar would accompany her. On Friday nights DiVarco typically took his wife into the city to dine at a restaurant on 51 East Oak Street which he allegedly co-owned -- like many of his businesses -- with Allegretti. The restaurant originally served Italian-style fare, and then was converted into a steak house in 1968. The family sometimes would vacation at the Abbey Hotel in Lake Geneva, WI.
It wasn't all work and no play for Little Caesar. DiVarco was an avid golfer (played the 9th Annual Italian Invitational Golf Tournament in August 1967 at the South Hills Country Club in Racine, WI where his "hoodlum group mingled with prominent citizens of Italian descent"), liked football (regularly attended home Bears games, and went to the 1971 superbowl in Miami, FL with Albert "Obbie" Frabotta), enjoyed bathhouses (took regular steams at the Division Street Bath House until 1968 when he "had a falling out with the operators of that bath house," and then taking "several customers with him" started going to the Luxor Baths at North Avenue and Milwaukee), and banged mistresses (among his squeezes was a red-headed former whore).
For most of his criminal career DiVarco never was held to account by the legal system. He spent a year in prison on the 1936 conviction for counterfeiting, and then served another year on a 1972 conviction for tax evasion. However, that good luck ran out in 1985 when DiVarco was convicted for his betting parlors, and sentenced to ten years. Just months after he began serving that sentence DiVarco died of a heart attack in January 1986 while resisting federal efforts to flip him into a cooperating witness for Team America.
DiVarco was a loyal company man to the end.